Jan 18, 2012—Cisco Systems, a worldwide leader in networking, communications and collaboration technologies, has always been ahead of the pack when it comes to leveraging new technologies to solve business challenges. More than a decade ago, the company used Internet technologies to collect financial data from its operations around the globe, enabling it to reconcile income and expenses, and to close its books at the end of every day. Now, Cisco is turning to radio frequency identification technology to manage its vast array of IT equipment.

In March 2011, the company went live with a system that employs EPC Gen 2 passive ultrahigh-frequency (UHF) RFID tags to automatically collect and centralize information regarding the locations of blade servers, networking equipment and other IT assets used within its data centers, as well as within the laboratories that carry out research on next-generation routers, switches and other products.

Cisco's Maryanne Flynn

The system allows workers searching for a particular type of equipment to quickly locate where such items are being utilized, so that they can borrow equipment available for use, which is faster and cheaper than buying a replacement. The system has also reduced the amount of time required for workers to conduct inventory for compliance with the Sarbanes-Oxley Act of 2002—a law intended to make a company's financial reports more transparent and accurate—from several weeks down to two hours.

The project commenced in January 2010, when senior management made a strategic decision to do more to optimize and safeguard Cisco's investment in asset. Maryanne Flynn, the firm's director of operations, and Ted Baumuller, the director of IT, marketing and Cisco.com, were appointed to co-manage the project. Instead of immediately researching the best RFID technology to meet their company's needs, they instead asked those who purchase, use, manage and dispose of the assets what their current processes were, as well as the problems they experienced regarding asset tracking.

"We realized that we needed to look at this first from a policy perspective, then a people perspective and then a process perspective," Flynn says. "We wanted to take a business view of it before jumping into the technology solution. We wanted to be disciplined in making sure we were clear about where we wanted to take this, and how far did we want to take tracking assets from a policy perspective. And then, from a people perspective and a process perspective: What did we need to do to support the long-term goal?"

Additionally, the group worked with a steering committee to clearly define the needs of different organizations within the company. "I'm from finance and operations," Flynn explains, "and Ted is from IT, so we were sort of outsiders taking a look at this across the company to best solve this problem. It was really important that we have strong leadership from a steering committee that represented those teams, such as the engineering teams that do the R&D on our next-generation routers and switches. We needed the support and input of those leaders along the way, so that if we needed to introduce any new policies and processes, they could get behind them and ensure their teams would follow them. They were part of the decision-making from the beginning."